Canada gets advance notice of US trade intentions

The United States will seek a new dispute resolution mechanism and tighter country of origin rules in a rejigged continental trade pact with Canada and Mexico, a newspaper reported Wednesday.

The daily Globe and Mail said incoming US Commerce Secretary Wilbur Ross informed the Canadian government of the administration's demands.

A formal letter will reportedly be sent to Ottawa within days of Donald Trump's inauguration, outlining the US position in a proposed renegotiation of the 1994 North American Free Trade Agreement (NAFTA), which the president-elect has panned as the "worst deal in history."

Asked about it, a spokeswoman for Canada's foreign minister would only say: "We have a constructive working relationship with Mr. Trump's transition team and talks are in progress."

The country of origin rules spell out exactly how much content from outside North America a product can contain and be shipped duty-free within the trade bloc.

The Trump administration is expected to seek to slash the allowable amount of overseas content.

It also wants to ax NAFTA's independent dispute resolution tribunals, which the United States has long complained give too much power to Canada and Mexico.

Most of the requested changes to NAFTA will target Mexico, an unnamed Canadian government official told the Globe and Mail.

"The clear indication we have gotten from that side of the operation is that they are targeting Mexico and not us," the official was quoted as saying.

"We are keeping an open line of communication with them so we know what things they are planning to do with Mexico and that have a major knock-on effect with us."